Twice during the day, there were almost +100 point rally moves in the DJIA. The rest of the session was another blow-off. The DJIA was being carried by just five stocks.

The Buy-side, however, was hammering the technology heavy NASDAQ as well as the NYSE-listed Financials. I commented later in the day that the Bulls seemed desperate to hold the line at the technically significant DJIA=12200. Same thing is happening this morning on both fronts.

Overnight, following yesterday’s action in New York, the rest of the world decided to sell, and that is the beginning of the tsunami I have been expecting. As big as they are, the Fed is unlikely to hold back this wave.

The Asia-Pacific markets which corrected yesterday for Japan’s Nikkei down -2.13% and India’s Sensex down -3.25%, continued to sell-off today as the Nikkei dropped -1.13% and the Sensex -1.17%. The other exchanges, closed the prior day, got caught up with the Shanghai index collapsing -7.73% (banks will be required to operate with more reserves and less leverage), Hong Kong down -4.21%, and Australia down -2.58%.

The European bourse action was quieter this morning, but that action is likely to pick up later in the session. At 9:35am ET, the UK FTSE (-0.47%), French CAC (-0.39%), and German DAX (-1.05%) are soft but not as much as many traders anticipated.

Yesterday, the DJIA (+70.51) and S&P 500 (+1.08) gained, while the NASDAQ Composite (-15.10) was sent into a further tailspin. Energy and Basic Materials were strongest. Tech and Financials were weakest. To rally, the market needs Tech and Financials to take the lead. Instead, Lehman reported a Q2 loss of $2.8 billion ($5.14/share), and announced they require $6 billion in capital, which took down the Financials.

Cara 100 winners on the day were XOM +2.6%, WMT +2.1%, RIMM +2.1% and NOK +1.8%. Losers were SNDK -3.9%, GRMN and UBS -3.4%, and GOL and DB -2.4%.

On the US macro-economic front, April Pending Home Sales had an unexpected lift by +6.3% over March. These contracts will not actually close for about six weeks, so we’ll have to wait until the May data is reported to see if there has been a trend reversal.

With the G-8 plus China, India and South Korea meeting over the weekend and announcing they were going to stand up to OPEC and the oil companies, Crude Oil prices came down hard. $WTIC dropped more than $4/bbl as traders locked in profits from Thursday and Friday’s over-bought rally that was probably a short squeeze.

The US Dollar got support from the falling oil price as well as from hawkish words from the Fed. However, the price of gold stayed at $900/troy oz through Monday, although barely.

The US long bond sold off, while the yield on the 10-year popped up to +4.0% again.

This morning, the $USD futures are stronger and precious metal prices are being hammered: at 9:48am ET, the Gold, Palladium, Platinum and Silver spot price (versus yesterday morning’s prices) are: 877.35 (898.58), 422 (432), 2016 (2041), and 16.90 (17.42) per ounce, respectively.

Crude oil prices are way up again, perhaps as an OPEC traders response to the G-8 communiqué, which is also pressuring this market today.

Liquidity is being withdrawn. The Bulls are in retreat.

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Comments & Outlook

When 10% of DJIA component stocks (AA, GM and MCD) are far and away higher than every stock in the Cara 100, and the top two of the Cara 100 are DJIA stocks XOM and WMT, and the NASDAQ Composite is well down while the DJIA is well up, then I believe the PPT Interventionists are at work.

Prior to Monday’s action, I opined, “I attribute … corrective behavior to have a lot to do with central bank market intervention.” In other words, with the Fed Bank of New York President Tim Geithner about to deliver an important speech on his need to gain control over all or most regulatory aspects of the financial services industry (NOT!), I was anticipating his FOMC trading desk to be supporting him.

After Friday, that support from the FOMC required serious attitude adjustment.

As I say, I expected it; we got it. That was yesterday.

The writing is on the wall. The DJIA elevator is on the way down… 12200… 11700… 11000… 10000. The buy-side is seeking value, and needs to clear the smoke and mirrors put in their way by Humungous Bank & Broker.

A week or two ago (time flies!), I opined that we would soon see a -20% hit to the XLF Financial Sector index and in particular the $BKX and $XBD bank and broker-dealer industry groups, which I felt would drop even more than -20%.

I’m not negative. In fact I am hopeful. I pine for the day in capital markets when we can trust our bankers as advisors. I want to return to the work of old-timers Graham & Dodd and Edwards and McGee. I’d even like to think this will be a normal Bear market.

But I am also not struck by credulity syndrome. I trust no one—at least not yet. When I start to, I will tell you.

[Pardon the typos, but with no Internet connectivity this morning I got started late. I did two reports in 35 minutes--a new record for the Trader Wizard.]

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Links & Charts

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International Economics Review

US Economic Calendar.

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Knobias Cara100 Tables

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Cara 100 Daily RSI-7 Charts

At least one RSI value >70:

Ticker	Last	RSI-7M	RSI-7W	RSI-7D	Zone
PBR	69.00	93.84	65.38	49.32
ATVI	34.58	89.71	88.59	72.41	Distribution Zone (for 1 days)
GGB	51.40	88.26	89.74	63.44	Sell alert (trig. 8 days ago [on 2008-05-29 at $49.59, +3.65% chg], after a 1 day DZ)
SYT	64.29	84.36	70.25	65.74	Sell alert (trig. 2 days ago [on 2008-06-06 at $63.52, +1.21% chg], after a 1 day DZ)
ECA	93.67	83.55	69.85	63.08
SU	68.44	77.87	71.92	56.59
WMT	59.57	76.67	78.11	65.81	Sell alert (trig. 2 days ago [on 2008-06-06 at $58.37, +2.06% chg], after a 1 day DZ)
TT	46.49	76.65	65.62	56.92
PDA	57.93	76.05	55.45	36.62	Sell alert (trig. 6 days ago [on 2008-06-02 at $63.80, -9.20% chg], after a 3 day DZ)
TS	65.38	74.75	83.76	74.57	Distribution Zone (for 3 days)
RIMM	134.12	74.46	62.22	47.64
CVX	101.20	74.36	76.08	61.17
STO	38.66	73.27	66.94	53.27
EXC	88.59	73.22	67.50	54.25
NUE	78.89	72.77	62.62	59.78
IMO	59.64	71.62	63.92	59.26
ABB	31.37	71.39	63.61	33.75
VCP	33.89	71.14	67.10	58.29
GG	41.74	70.57	57.54	61.66
NKE	68.58	70.39	60.59	57.76
QCOM	47.11	67.57	70.72	46.99	Sell alert (trig. 7 days ago [on 2008-05-30 at $48.54, -2.95% chg], after a 1 day DZ)
DELL	24.15	54.66	77.04	79.39
DNA	74.09	48.98	55.29	72.16

At least one RSI value <30:

Ticker	Last	RSI-7M	RSI-7W	RSI-7D	Zone
UBS	23.10	21.77	19.59	28.69	Accumulation Zone (for 1 days)
BC	13.19	22.58	27.01	25.95	Accumulation Zone (for 2 days)
ERJ	32.51	23.93	19.46	14.00	Accumulation Zone (for 5 days)
GOL	13.77	27.70	31.84	27.62
SBUX	17.52	28.41	49.88	46.95
WFMI	28.60	29.46	34.86	43.69
BMY	20.63	31.18	32.49	24.22
DB	97.70	31.52	21.73	13.34
BDK	61.04	32.42	29.18	29.48
JCP	38.09	33.04	37.69	29.42
IBN	34.67	33.83	28.29	27.32
GSK	42.40	34.36	38.38	29.70
GE	30.06	34.70	26.84	32.51
KB	59.74	34.75	40.90	29.41
BA	73.95	36.02	31.54	19.79
WHR	68.42	36.19	27.89	26.00
GS	165.76	39.94	36.63	27.61
HDB	85.49	41.16	27.96	25.82
ERTS	46.93	41.23	34.39	29.08
BBBY	29.78	43.65	42.32	22.33
ABV	66.35	43.81	34.07	27.99
UTX	67.55	44.06	35.41	28.76
CHA	60.86	45.24	30.72	25.15
CHL	71.04	49.92	32.76	27.80
HBC	82.13	50.00	48.31	29.61
TEF	81.72	51.89	34.96	25.96
VIP	31.25	56.81	43.49	28.18

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International Equity Markets Review

Europe

Here is the latest session data for the bourses of Europe.

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Here is the latest session data for the London stock exchange FTSE.

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Here is the latest session data for the German DAX.

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Here is the latest session data for the French CAC 40.

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Here is the latest session data for the Milan Italy stock exchange MIBTEL.

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Here is the latest session data for the Swiss market index.

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Asia-Pacific

Here is the latest session data for the Asia-Pacific stock exchanges.

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Here is the latest chart for the Japanese Nikkei 225 index.

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Here is the latest chart for the Singapore index .

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Here is the latest chart for the Shanghai Composite index .

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Here is the latest chart for the Hong Kong Hang Seng index .

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Here is the latest chart for the India BSE 30 index .

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Here is the latest chart for the Australian All Ordinaries index .

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US Equity Markets Review

DJIA (interactive) chart

NASDAQ Composite (interactive) chart

Table 14: Dow 30 List

Sorted by 1-Week Price Performance

Symbol	Close	1Day Change	1Day %Change	1W %Change	2W %Change	4W %Change	YTD %Change	3M %Change	6M %Change	12M %Change
WMT	59.57	1.20	2.06%	4.14%	6.85%	4.18%	27.01%	19.38%	21.52%	18.95%
AA	42.17	2.95	7.52%	3.79%	4.77%	8.02%	16.72%	15.22%	14.25%	6.33%
HPQ	47.63	0.00	0.00%	2.98%	5.94%	-3.05%	-4.38%	0.68%	-8.12%	4.04%
CVX	101.20	1.70	1.71%	1.84%	0.47%	3.91%	8.28%	18.70%	11.26%	25.42%
XOM	89.07	2.28	2.63%	1.43%	-1.80%	0.28%	-4.75%	7.98%	-2.66%	7.73%
MCD	59.31	2.36	4.14%	1.30%	2.74%	0.12%	2.08%	13.47%	-1.41%	15.37%
PG	66.07	0.70	1.07%	1.09%	1.23%	1.32%	-8.63%	0.41%	-10.86%	4.76%
VZ	37.94	-0.29	-0.76%	0.21%	2.32%	0.08%	-12.20%	8.15%	-16.25%	-11.91%
MSFT	27.71	0.22	0.80%	-0.32%	-1.21%	-5.72%	-21.32%	-0.57%	-19.75%	-7.79%
DIS	33.18	0.17	0.51%	-0.36%	-0.15%	-3.27%	4.21%	7.87%	1.19%	-2.98%
MMM	75.82	0.96	1.28%	-0.56%	0.01%	-0.66%	-8.33%	-0.90%	-12.03%	-11.78%
GE	30.06	0.04	0.13%	-1.15%	-1.22%	-6.85%	-18.23%	-6.73%	-19.26%	-19.45%
IBM	125.86	0.92	0.74%	-1.18%	1.34%	1.45%	20.22%	10.46%	15.62%	22.11%
JNJ	65.63	-0.13	-0.20%	-1.32%	1.09%	-1.38%	-0.42%	6.70%	-3.03%	5.63%
DD	46.21	-0.11	-0.24%	-1.76%	-2.96%	-4.60%	5.65%	2.69%	-2.08%	-9.62%
CAT	80.81	0.82	1.03%	-1.85%	-0.91%	-1.16%	14.41%	15.71%	8.91%	2.92%
INTC	22.76	-0.14	-0.61%	-1.90%	-2.78%	-2.61%	-10.22%	13.40%	-17.92%	4.26%
KO	55.86	0.06	0.11%	-2.00%	-4.72%	-0.52%	-8.56%	-5.08%	-11.54%	8.11%
HD	26.54	-0.64	-2.35%	-2.28%	-0.86%	-5.15%	1.65%	2.55%	-10.00%	-30.07%
AXP	44.11	-0.54	-1.21%	-2.52%	-2.95%	-9.91%	-13.58%	6.21%	-22.56%	-30.03%
MRK	36.99	-0.50	-1.33%	-3.09%	-4.52%	-5.13%	-35.52%	-11.40%	-39.03%	-26.23%
UTX	67.55	0.54	0.81%	-4.50%	-3.51%	-7.63%	-10.18%	0.09%	-13.48%	-3.82%
GM	16.48	0.26	1.60%	-5.50%	-6.36%	-18.78%	-32.49%	-24.95%	-42.42%	-46.84%
T	37.56	-0.65	-1.70%	-5.86%	-2.52%	-2.67%	-8.39%	7.28%	-2.37%	-6.71%
PFE	18.02	0.06	0.33%	-6.05%